Property prices show biggest monthly rise in six years

HOUSE prices made their sharpest monthly jump in more than six years yesterday, fuelling renewed optimism that the housing market might help lead the country out of recession.

Homes across Britain surged 2.6 per cent in value on average last month, according to the Halifax index.

It is the biggest monthly jump in house prices since October 2002, putting the average property at £158,565, and follows the 1.2 per cent May rise reported last week by another important index from Nationwide.

Yesterday's index heightened speculation that house prices could soon stabilise after plummeting more than 20 per cent since their peak in 2007.

The lift also helped reduce the annual rate at which house prices are falling, from a record 17.7 per cent in April to 16.3 per cent – based on the average house price during the past three months compared with the same period a year earlier.

But Halifax cautioned against reading too much into the increase, warning that even during a pronounced downturn house prices did not always move in the same direction month after month.